Unsexy cities see some of the country’s fastest home price growth
Billy Joel’s ode to a small Pennsylvania town didn’t predict this 2024 boom.
No offense to Allentown, but in terms of beauty, wealth, climate, or cultural caché, it ain’t exactly Miami or San Francisco.
Nevertheless, the Allentown-Bethlehem-Easton urban area in Pennsylvania’s fast-growing Lehigh Valley enjoyed the sharpest annual home price appreciation out of the country’s 100 largest metropolitan areas, according to Q1 data just released by Federal Housing Finance Agency.
Interestingly, several other grittier Northeastern regions that have endured decades-long struggles with deindustrialization — Camden, NJ and Rochester, NY, for instance — are rising to the top of the rankings of home price appreciation in the US, along with other decidedly unsexy locales like New York’s Albany-Schenectady-Troy — my hometown! — and Hartford, Connecticut.
What’s going on? It’s not completely clear. The search for affordable housing is clearly driving some people to expand their housing hunt to exurban areas which might require much longer commutes. With a 90-minute drive to Manhattan, Pennsylvania’s Lehigh Valley meets that criteria. Proximity to the big city has also made the Lehigh Valley a hotspot for warehousing jobs, providing a strong employment base. Immigration, which has been a big driver of population growth in the Lehigh Valley, is also likely playing a role.
Some of the outperformance of the cities I’ve spotlighted also reflects the fact that cities that saw remarkable price spikes during the pandemic-era housing boom such as Austin, Texas couldn’t sustain double-digit growth rates forever. Still, the rise of the unsexy city is an interesting dynamic to keep an eye on.
